I never went to UCSC but I was born and raised in Santa Cruz so I thought I could throw my 2 cents in. Santa Cruz is the most beautiful place I have ever lived by far, and probably one of the most beautiful places I have ever been to. The campus is incredible, I would often go to just hang out even though I didn't go to the school. There are not many places you can find mountains, the ocean, lakes, redwood trees and open meadows within a 10 minute drive in any direction. I went to UCLA for undergrad and I can tell you I missed the nature more than I thought I would.
On a major downside, it is EXPENSIVE to live there. I think the west-side (UCSC) is even pricier than other parts, like where I grew up, but if you get roommates and divide up a big house it can be affordable. I'm not sure what kind of stipends they give, but it is one of the most expensive cities in California. I would say even sharing a room you won't find anything cheaper that $500 lowest, not including utilities. The weather is pretty mild, rarely over 80 or under 50, so you wont need much heat/AC, but if you want a more comfortable place, perhaps with your own room, you're looking at $700 a month. There are nice places that are a little farther from campus, although SC isn't that big so it's not a big deal. If I were to move back I would begin looking around Pleasure Point, lots of small places that are surprisingly low priced if you look on craigslist, and right by the beach and major commercial street (41st avenue) but still far from anything too hectic. There are also some nice places in Aptos, but it's kind of far from UCSC without a car.
The music scene is top of the line. There are so many bands, musicians and performers from Santa Cruz (I went to high school with 2 American Idol top finalists) and there are some great venues for every kind of music. The Catalyst is quite famous, and brings in big names, and Kuumbwa is a world famous jazz club, both about a 10 min drive or less from campus. There is also a great athletic community, running clubs that run along the most amazing 5 miles anywhere- West Cliff- and bike groups, soccer teams, horseback riding, SC has it all.
I could go on with my 20 years worth of experiences and loyalty to the town, but if anyone has questions please don't hesitate to ask! Good luck and I hope you all enjoy beautiful Santa Cruz!